Google, Innovation & Trust

Originally posted on June 18, 2014

Today a piece I wrote for Harvard Business Review hits the “virtual” stands.  There are times when researching a hot topic is a curse (Mr. Snowden made privacy and surveillance touchy) but there are other times when it is a blessing.  The Google European Court of Justice’s (ECJ) decision  or “Right to be Forgotten” case has given me a chance to showcase the importance of privacy and data protection in the business world.

I have written a few pieces about data as it pertains to the financial services (here and here), and on the clash of US and EU privacy cultures and its impact on transatlantic counter-terrorism cooperation. The HBR piece focuses on how privacy can lead to profit and it draws heavily upon my interviews with the IT and corporate communities while I was in Europe.

In the popular imagination, the internet exists as a borderless world. In reality, there are many internets, and the rules that govern each of them reflect local beliefs about the role and responsibility of technology within society. The ECJ ruling classified Google as a data controller, and therefore under obligation to remove certain links to personal data upon an individual’s request, and it is a prime example of how localized privacy cultures and laws can assert themselves beyond their sovereign borders.  Although it specifically mentions search engines, it has implications for multinationals as well.

I think that the IT world was shocked by the ECJ decision because it holds the borderless internet view, it sees any curb on the free flow of information as censorship and a threat to its business model, and it is accustomed to the US-based view of data as property where corporations self-regulate data collection and usage.  Also, the Judge Advocate’s opinion, which concluded Google was not a data controller, set expectations for the final outcome of the case.

As the EU itself has been trying to figure out the legalities of balancing human rights with good commerce, the legislative ambiguities of the EU Data Protection Directive have in the past provided businesses, including European companies, with some wiggle room.  The ECJ verdict tightened the space to wiggle in some instances, but legal instruments are notoriously difficult to rely upon for definitions or guidelines for enforcement when applied in practice.

Problems of balance remain.  There is the balance of responsibilities between controllers and processors (are these distinctions even the way forward? One interviewee said we need to think of this in terms of accountability), the balance between human rights and national security, and human rights and the economy, the balance among differing views of privacy, and the realities that the physical structures in which the internet operates are transnational, which make it difficult to restrict the flow of data to certain transmission paths, let alone implement regional or national standards when doing so.  “You shouldn’t, and can’t, make Europe an island.”

No, the ECJ ruling does not mean you can be completely forgotten once you are on the global information superhighway, but it does mean that there are opportunities for government and business to innovate how data is managed, transferred, and used.  In short, legal instruments are not enough, the private sector needs to take privacy beyond compliance because its clients are demanding protections even when the law doesn’t require it.  In the HBR piece, I assert that this is part of a growing trend, spearheaded by consumers themselves (in the US, they talk about consumers, in the EU they speak of individuals) who believe that corporations feel entitled to use every bit of information they can find as part of a ‘big data’ marketing plan to endlessly feed algorithms for their own profit.  American IT firms did not help this image either.   EU legislators and privacy activists were not accustomed to the aggressive nature of US style K-Street lobbying in Brussels as IT firms campaigned against aspects of the new EU Data Protection Regulation.  The Snowden revelations only added fuel to their ire.  But this disgust has not been confined to the EU, Americans are increasingly suspicious of where their information flows end up too.

I have spoken about trust on this blog before regarding regulatory-corporate relations, but it applies here as well.  Corporations have to maintain the trust of their clients to keep them, whether they refer to them as individuals or consumers, and treat their data with respect. Individuals have a strong sense of ownership over their data because it reflects their personal choices, and while some consumers love the convenience that data analytics provides, some do not.  So I ask (somewhat rhetorically because I know there are some efforts, but will tackle them in later posts) businesses to consider services for those who want (and legally demand) more control over their data.

The HBR article touches upon some fundamental issues and I hope to follow up with another piece that connects data privacy to data security.  Unfortunately it is often treated as a separate issue, but privacy, security, and trust are endemic to any business relationship and when done right, they are, again, profitable.